The year of commodities?

Here it is, my first post in 2018. I won’t give you NY resolutions or something. Let me first give you a quick overview of my past posts to gain a perspective before we dive into today’s topic. I think this is relevant because some of these trends started in 2017 and they could pick up steam in 2018.

The theme that could be very big this year is a big rally in commodities in my opinion. I’ve been writing a lot about commodities and commodity related products/assets in the past. When oil was at $45 and everyone was screaming it’s going lower I was taking the other side. It’s above $60 now. When gold was at $1300 I was suggesting it could drop by $60-80 at which point it could be a great level to pick it up as a long-term hold. It did precisely that and is sitting at $1320 now. Not to mention bullish copper and some other ones. Even though the above calls went great not everything did. Cocoa (and other softs) showed some signs of life during the second half of ’17, but were very quickly brought back to reality; I wouldn’t call it a day just yet.

US dollar is very important to the whole commodities story. While I had second thoughts about my bearish thesis as I see some head winds at the moment the dollar continued its slide lower. If my assumption is correct and the dollar continues what is doing, this would be a great tell and an even bigger tail wind for commodities. Continue reading “The year of commodities?”

Do you like cocoa? I do. A lot!

Not sure if you are aware of butter products’ shortages in Europe lately, but because of very high demand and reduced supply prices are surging. It feels that financial experts are too busy calling a top in stocks and are missing, in my mind, one of the biggest macro stories of the next couple of years.

What if we start seeing something similar in other softs and agricultures? What if prices of other food products start surging too? I think this could have some serious effects on the real economy.

I will let other people discuss potential effects, but let me rather focus on where prices might go and what you could do about it.

Continue reading “Do you like cocoa? I do. A lot!”